LSE Identifies GBP1.1bn Shortfall in UK Governments Broadband Funding

A new study from the London School of Economics (LSE) has estimated that the UK governments plan to make superfast broadband (24Mbps+) ISP services available to 90% of “people in each local authority area” by 2015 is now at risk due to a significant shortfall of £1.1 billion.

The government has already aside £530m to support this goal and a further £150m was recently added for super-connected cities (Urban Broadband Fund), with another £100m (total £780m) coming from European funding. A further £300m could, if needed, be found (between 2015-2017) by using some of the BBC’s TV Licence Fee.

On top of all that the UK local authorities and the private sector are expected to match-fund with the government’s commitment. At this stage it’s difficult to know what the real-world total for all this would be as many of the contracts have yet to tender, although the LSE study suggests that total public and private investment will amount to £1.3 billion (a full breakdown of this was not provided).

Study Statement:

“The government expectation of deploying ‘the best superfast broadband network’ in Europe by 2015 seems optimistic. The government target of 100% coverage by basic broadband by 2015 is likely to be met, but it is less clear when the government targets of 90% coverage by superfast broadband, and 100% coverage by fast broadband, are likely to be met.

By 2017 there might be enough users of superfast broadband to justify public funding for reaching the remaining 10%. However widespread coverage may be, approaching 100% take-up is likely to take until around 2025, because of the large proportion of older people who are not online.”

The above comment seems to confuse matters by mentioning the UK’s 90% “superfast” goal before a 100% goal for “fast” services, which can only be a reference to Europe’s Digital Agenda strategy that aims to make superfast broadband ISP speeds of 30Mbps+ available to everybody by 2020.

The UK government has yet to construct a clear strategy for the 2015-2020 period, although the CEO of BTOpenreach, Olivia Garfield, has repeatedly said that BT could achieve 90% through match-funding with the government’s BDUK budget (BT’s privately funded target only reaches up to 66% by the end of 2014). BT, for good or ill, are still expected to win the lion’s share of BDUK funding (easy when your only competitor is an unproven project from Fujitsu).

Sadly it’s difficult to know precisely how the LSE study arrived at its figure of £1.1bn (shortfall) but many people might suggest that even that is too low to do the job properly. Meanwhile the final Local Broadband Plans (LBP) should, according to the governments deadline, have been “agreed” by the end of last month (April 2012) and we’re currently awaiting an update on that.